Practicing Success
When the inventory turnover ratio is dangerous for the company? |
High turnover of inventory Low turnover of inventory Both of these None of these |
Low turnover of inventory |
Low turnover of inventory may be due to bad buying, obsolete inventory, etc., and is a danger signal. High turnover is good but it must be carefully interpreted as it may be due to buying in small lots or selling quickly at low margin to realise cash. |